EXHIBIT 10.1
------------
LOT 3 OPTION AGREEMENT
This LOT 3 OPTION AGREEMENT (this "Agreement") is made as of
August 5, 2003 (the "Effective Date"), by and between NB LOT 3, LLC, a
Delaware limited liability company ("NB 3"), the address of which is 000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, and MAUI BEACH
RESORT LIMITED PARTNERSHIP, a Delaware limited partnership ("Optionee"),
the address of which is 000-000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0.
RECITALS:
--------
A. NB 3 is the record fee simple owner of that certain parcel of
land situate at Kaanapali, District of Lahaina, Island and County of Maui,
State of Hawaii, being Xxx 000, xxxx 26.692 acres, as shown on Map 86,
filed in the Office of the Assistant Registrar of the Land Court of the
State of Hawaii (the "Land Court") with Land Court Application No. 1744 of
Pioneer Mill Company, Limited, and being land(s) described in Transfer
Certificate of Title No. 630,552 issued to NB 3 (the "Property").
B. Pursuant to and in accordance with that certain Property
Purchase Agreement and Option dated as of August 4, 2003 (the "Lot 4
Purchase Agreement"), entered into by and among NB Lot 4, LLC, a Delaware
limited liability company (the "Lot 4 Seller"), Optionee and NB 3, NB 3
agreed to grant to Optionee an option to purchase the Property from NB 3,
on and subject to the terms and conditions set forth in this Agreement.
AGREEMENT:
---------
In consideration of One Hundred Dollars ($100.00) paid by Optionee to
NB 3, the Recitals set forth above, which by this reference are
incorporated herein, the mutual promises and agreements set forth below,
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, NB 3 and Optionee hereby agree as follows:
1. GRANT OF OPTION. NB 3 hereby grants to Optionee the exclusive
right and option, upon and subject to the terms and conditions set forth
herein (the "Option"), to purchase the Property, together with all of
Seller's right, title and interest in and to the following property and
other rights and interests (the "Additional Property"): (a) all buildings,
structures, fixtures and other improvements, if any, located on or under
the Property; and (b) all easements, rights-of-way, covenants,
restrictions, reservations, privileges, licenses and other rights and
interests, if any, appurtenant to the Property or running with the land
comprising the Property.
2. TERM. The term of the Option shall be two (2) years,
commencing on the Effective Date and expiring at 4:00 p.m. (Hawaii Standard
Time) on the date which is two years after the Effective Date (the
"Expiration Date").
1
3. EXERCISE OF OPTION. Provided that this Agreement shall not
have been earlier terminated pursuant to Section 19 below, Optionee may
exercise the Option at any time prior to 4:00 p.m., Hawaii Standard Time,
on the Expiration Date by (i) delivering to NB 3 and the Escrow Agent (as
defined below) written notice stating that Optionee is exercising the
Option (the "Notice of Exercise"), and (ii) delivering to the Escrow Agent
the Deposit (as defined below) in accordance with Section 5 of this
Agreement. Notwithstanding anything to the contrary in this Agreement or
the Xxx 0 Xxxxxxxx Xxxxxxxxx, but without limiting Section 19 of this
Agreement, the rights of Optionee under this Agreement shall terminate if
Optionee fails to timely deliver the Notice of Exercise and the Deposit in
accordance with this Section 3. Further upon such failure, both NB 3 and
Optionee shall be released from all further obligations under this
Agreement, except for the continuing indemnity obligations under the Right-
of-Entry Agreement and Section 30 of this Agreement and the confidentiality
obligations under Section 31 of this Agreement.
4. CALCULATION OF PURCHASE PRICE.
The purchase price (the "Purchase Price") to be paid by Optionee to
NB 3 for the Property pursuant to this Agreement shall be the Base Price
(as defined in subsection 4(a) below), adjusted as provided in subsection
4(b) below.
(a) BASE PRICE.
(i) The "Base Price" shall be the sum of (A) Twenty-Two
Million Five Hundred Thousand U.S. Dollars (U.S. $22,500,000.00) plus
(B) Sixty Thousand U.S. Dollars (U.S. $60,000.00), subject to the
adjustment under subsection 4(b)(i), multiplied by the amount by
which the Maximum Unit Count (as defined below) is greater than 350.
As used herein, the "Maximum Unit Count" shall be the sum of (x) the
maximum number of Units (as defined in Section 4(a)(ii) below) which
may be developed on the Property pursuant to any development plan(s)
for the Property prepared and submitted by or on behalf of Optionee,
its successors and assigns, to the County of Maui (the "County") and
for which a special management area use permit ("SMA Permit") has
been issued by the County (or to the extent an SMA Permit is not
required, for which building permit(s) have been issued by the
County) ("Approved Development Plan"), and (y) the amount by which
the maximum number of Units which may be developed on "Lot 4"
(referenced in Section 13 below, and being the real property
described in and covered by the Xxx 0 Xxxxxxxx Xxxxxxxxx) exceeds
700, either pursuant to an Approved Development Plan for Lot 4
submitted by or through Optionee, its successors and assigns, as the
owner of Lot 4, or pursuant to any amendment or termination of the
Lot 4 Unit Count Declaration (as defined in Section 10 (c)(xviii)
below) caused or permitted by or through Optionee, its successors and
assigns, as the owner of the Property.
(ii) As used in this Agreement, a "Unit" shall mean a
single hotel room or suite hotel room, apartment unit, condominium
unit, or dwelling of any kind; provided, however, that each single
hotel room, suite hotel room, apartment unit, condominium unit or
dwelling incorporating the "lock-off' design (which permits the unit
owner to use a portion thereof as
2
a separate unit, and which is sometimes referred to as a "lock-off
unit" or "convertible apartment unit") shall be counted as two Units
for purposes of determining the total number of Units, regardless of
whether such unit has more than one bedroom.
(b) ADJUSTMENTS TO BASE PRICE.
(i) CONSUMER PRICE INDEX ADJUSTMENT.
(A) If the Current Index (as defined below) is higher
than the Comparison Index (as defined below) at the time of any
calculation or recalculation of the Purchase Price, then the
Base Price shall be increased by multiplying the $60,000.00
figure specified in subsection 4(a)(i) above by a fraction, the
numerator of which is the Current Index and the denominator of
which is the Comparison Index. For example, if the Comparison
Index is 125 and the Current Index as of the first anniversary
date is 130, the $60.000.000 figure would increase to U.S.
$62,400.00. As used herein: "C.P.I." means the Consumer Price
Index for All Urban Consumers (Base Year 1984-86 = 100) for
Hawaii/City and County of Honolulu, published by the United
States Department of Labor, Bureau of Labor Statistics;
"Current Index" means the C.P.I. published as of the date of
any calculation or recalculation of the Purchase Price or, if
not published as of that date, then the date nearest to and
immediately preceding such date; and "Comparison Index" means
the C.P.I. published as of the earlier of (1) the date of the
Notice of Exercise or (2) January 1, 2005 or, if not published
as of that date, then the date nearest to and immediately
preceding such date.
(B) If the C.P.T. is changed so that the base year
differs from the base year that was used to determine the
C.P.I. as of the Effective Date, then the C.P.I. shall be
converted in accordance with the conversion factor published by
the United States Department of Labor, Bureau of Labor
Statistics. If the C.P.I. is discontinued or revised, the
C.P.I. shall be replaced with such governmental index or
computation as shall obtain substantially the same result as
would otherwise have been obtained if the original C.P.I. had
not been discontinued or revised.
(ii) CHANGES IN UNIT COUNT. Upon issuance of an SMA Permit or
building permit for an Approved Development Plan for either of Lot 4
or the Property after Closing, or upon any amendment or termination
of the Lot 4 Unit Count Declaration, as referenced in subsection
4(a)(i) above, after Closing, an adjustment will be made by NB 3 and
Optionee to the Purchase Price paid at Closing if and to the extent
applicable based upon a recalculation of the Base Price pursuant to
subsection 4(a)(i) above and the then-current Maximum Unit Count
resulting from such Approved Development Plan or such amendment or
termination. If, based upon any such recalculation, the Base Price is
greater than the Base Price used to determine the Purchase Price at
Closing, Optionee shall pay to NB 3, upon demand of NB 3, an
additional amount equal to the increase in Base Price (adjusted in
accordance with subsection 4(b)(i) above). Optionee shall give
written notice to NB 3 promptly upon each issuance of an SMA Permit
or building permit for an Approved Development Plan for Lot 4 or the
Property, and promptly upon any amendment or termination of the Xxx 0
0
Xxxx Xxxxx Xxxxxxxxxxx. The terms and conditions of this Purchase
Price adjustment and payment obligation shall be set forth in an
agreement (the "Price Adjustment Agreement"), substantially in the
form attached as EXHIBIT "I" to this Agreement or such other form as
may be agreed in writing by NB 3 and Optionee prior to Optionee's
delivery of the Notice of Exercise, which Price Adjustment Agreement
shall be executed and delivered at Closing by NB 3 and Optionee, and
reference thereto will be included in the Lot 3 Unit Count
Declaration (as defined in Section 14(c) below).
(iii) SECURITY. Optionee's performance in full of its
obligations under the Price Adjustment Agreement shall be secured by
a mortgage (the "Price Adjustment Mortgage") in favor of NB 3 and
covering the Property and the Additional Property, substantially in
the form of the Lot 4 Mortgage (as defined in Section 19(a) below),
to be executed by Optionee and recorded at Closing, and by a UCC
Financing Statement relating to the Property and the Additional
Property, substantially in the form of the UCC Financing Statement
filed in connection with the Lot 4 Mortgage, to be filed at Closing.
NB 3 shall subordinate its interests under the Price Adjustment
Mortgage to a mortgage given by Optionee and recorded at Closing in
favor of an unaffiliated lender to secure acquisition financing for
the Property in an amount not to exceed 60% of the Purchase Price
paid to NB 3 at Closing pursuant to this Agreement. Provided that
Optionee is not then in default under the Price Adjustment Agreement
or the Price Adjustment Mortgage, the Price Adjustment Mortgage shall
be released from the Property at such time as an Approved Development
Plan has been obtained for the Property, or from such subdivided
portion(s) of the Property for which an Approved Development Plan has
been obtained; provided, however, that such Approved Development Plan
is for the full and final intended use of the Property, or the
subdivided portion thereof covered by the Approved Development Plan,
and provided further that such Approved Development Plan shall not
anticipate, or otherwise provide for, future development of any
portion of the Property (or such subdivided portion) in any manner
which will or could increase the number of Units which may be
developed on the Property. No such release (or partial release) of
the Price Adjustment Mortgage shall be construed to release Optionee
from its continuing liability and obligations under the Price
Adjustment Agreement; provided, however, following completion of
construction (as evidenced by issuance of certificates of occupancy)
of all improvements covered by any Approved Development Plan, if such
Approved Development Plan is for the full and final intended use of
the Property, or the subdivided portion thereof covered by the
Approved Development Plan, and if such Approved Development Plan, or
any development or ownership documents (including, without
limitation, condominium or time share declarations) relating to the
land covered thereby, shall not anticipate, provide for, or otherwise
reserve any rights relating to, future development of any portion of
the Property (or such subdivided portion) in any manner which will or
could increase the number of Units which may be developed on the
Property, then, at the written request of Optionee, NB 3 shall
release and discharge Optionee, in writing, from all such liabilities
and obligations to the extent related to the Property (or subdivided
portion thereof) that is the subject of such Approved Development
Plan.
5. PAYMENT OF PURCHASE PRICE. The Purchase Price, calculated as
of the date of the Notice of Exercise, shall be payable by Optionee to NB 3
as provided below. All amounts payable hereunder shall be paid in United
States dollars by electronic or wire transfer of
4
or immediately available funds, in accordance with written instructions
delivered by NB 3 Escrow Agent to Optionee, or in such other form as is
acceptable to NB 3. Except as otherwise provided in this Agreement, all
interest accruing on such deposits shall accrue for the benefit of
Optionee.
(a) DEPOSIT. As a condition precedent to Optionee's proper and
effective exercise of the Option pursuant to Section 3 above, Optionee
shall deposit into Escrow, prior to 4:00 p.m., Hawaii Standard Time, on the
Expiration Date (and in no event later than two business days after
Optionee's delivery of the Notice of Exercise pursuant to Section 3 above),
the sum of THREE MILLION AND NO/100 U.S. DOLLARS (U.S. $3,000,000.00) (the
"Deposit"), to be held and disbursed by Escrow Agent in accordance with
subsection 5(b) below. The Deposit shall not be refundable to Optionee,
except only as provided in Sections 11 and 19(b) of this Agreement.
(b) DISBURSAL OF DEPOSIT TO NB 3. Immediately upon Optionee's
exercise of the Option, as evidenced by delivery of the Notice of Exercise
to Escrow Agent and NB 3 and delivery of the Deposit to Escrow Agent, in
accordance with Sections 3 and 5(a) above, Escrow Agent shall release and
disburse the Deposit to NB 3 (and shall release and disburse to Optionee
all interest, if any, accrued on the Deposit prior to disbursal of the
Deposit to NB 3). At Closing, the Deposit shall be applied toward the
Purchase Price. All interest accrued on the Deposit after the date of
disbursal to NB 3 pursuant to this subsection 5(b) shall accrue for the
benefit of NB 3 and shall not be applied to the Purchase Price, nor shall
such interest be payable to Optionee in or 19(b) of this the event of any
refund of the Deposit to Optionee pursuant to Sections 11 Agreement.
Optionee and NB 3 expressly, specifically, and irrevocably direct and
authorize Escrow Agent to release and disburse the Deposit as provided in
this subsection 5(b). Escrow Agent is hereby relieved of liability for so
releasing and disbursing the Deposit to NB 3.
(c) ADDITIONAL CASH AT CLOSING. On or before one business day
prior to the Closing Date (as defined below), Optionee shall deposit into
Escrow the balance of the Purchase Price, plus or minus the net amount to
be paid by, or credited to, Optionee at Closing under Section 9 of this
Agreement.
6. TITLE.
(a) DEED. At Closing, NB 3 shall convey the Property (and any
Additional Property) to Optionee by a limited warranty deed (the "Deed"),
substantially in the form attached as EXHIBIT "2" to this Agreement, or in
such other form as may be agreed in writing by NB 3 and Optionee prior to
Optionee's delivery of the Notice of Exercise, which Deed shall convey to
Optionee fee simple title subject only to the Permitted Exceptions (as
defined in subsection 6(b) below). Optionee agrees to and shall take title
to the Property at Closing subject to the Permitted Exceptions.
(b) PERMITTED EXCEPTIONS. Attached as EXHIBIT "3" to this
Agreement is a copy of a preliminary title report dated as of February 13,
2003 (the "Lot 3 Title Report") covering the Property, issued by Title
Guaranty of Hawaii, Inc. Optionee acknowledges that, as provided in
5
and pursuant to the Xxx 0 Xxxxxxxx Xxxxxxxxx, xx has received copies of all
recorded documents and maps referenced in the Lot 3 Title Report, other
than documents related to the Amfac Mortgages (as defined in Section
9(a)(ii) below). Attached as EXHIBIT "4" to this Agreement is a list of
exceptions, reservations, easements, and other items which NB 3 proposes
shall be recited or referenced in the Deed as permitted encumbrances or
exceptions to title and exclusions from NB 3's limited warranty under the
Deed. If Optionee disapproves of any items listed in Exhibit "4" or any
other exceptions or defects discovered by Optionee through its
investigation of the state of the title to the Property, Optionee may, at
its discretion, inform NB 3 of such disapproval by delivering written
notice (the "Title Notice") thereof to NB 3 no later than sixty calendar
days prior to the Expiration Date (and in no event later than ten days
prior to Optionee's delivery of the Notice of Exercise). The Title Notice
shall specify in detail the disapproved item(s), exception(s) and defect(s)
(the "title defect"). Upon receipt of the Title Notice, NB 3 shall, at its
option, notify Optionee in writing, delivered to Optionee no later than
twenty calendar days prior to the Expiration Date, either: (i) that NB 3
shall agree to cure or otherwise remove the title defect from title and the
Deed prior to the Closing Date; or (ii) that NB 3 shall not or cannot cure
or otherwise remove the title defect, in which case, if Optionee delivers
the Notice of Exercise, Optionee shall be deemed to have rescinded its
disapproval of the title defect. Optionee agrees that NB 3 has no
obligation to cure any title defect, except that NB 3 shall discharge from
the Property the Amfac Mortgages and any other mortgages, deeds of trust,
attachments and monetary liens (excepting, however, any mortgages and liens
affecting the grantee's interest under the Grant of Lot 4 Access Easement
(as defined in Section 10(c)(xx) below)) ("Monetary Liens"). Except for
Monetary Liens, Optionee shall be deemed to have approved all items listed
in Exhibit "4" and all other exceptions and defects affecting or
encumbering the title to the Property existing as of the date of Optionee's
effective exercise of the Option and not expressly and specifically
disapproved in the manner provided above in this subsection 6(b). All such
approved items are referred to in this Agreement as the "Permitted
Exceptions."
(c) TITLE INSURANCE. Prior to Optionee's delivery of the Notice of
Exercise, Optionee may, at its option and expense, obtain a binding
commitment (the "title commitment"), from a title insurance company (the
"title company") licensed in the State of Hawaii, to issue at Closing an
owner's policy of title insurance (the "title policy") with respect to the
Property, with such extended coverage and endorsements as Optionee may
require and in such amount as Optionee shall direct but not to exceed the
Purchase Price, free of all Monetary Liens but subject to the Permitted
Exceptions. Without limiting the terms of Section 19(b) of this Agreement,
any failure of Optionee to obtain the title commitment, the title policy,
or any other policy of title insurance or title assurances, shall not in
any way affect Optionee's obligations under this Agreement.
(d) ASSIGNMENT OF WASTEWATER CAPACITY. At Closing, NB 3 shall
cause Kaanapali Development Corp., a Hawaii corporation ("KDC") (being an
affiliate of NB 3), to deliver to Optionee an assignment of a portion of
KDC's reserved wastewater capacity at the Lahaina Wastewater Treatment
Plant, for use relating to the Property and for no other purpose, which
wastewater capacity to be assigned shall be such amount as required by the
County of Maui for Optionee's development on the Property of 550 Units or
such lesser number of Units as shall be
6
approved by appropriate governmental authorities for development on the
Property. Such assignment shall be substantially in the form attached as
EXHIBIT "5" to this Agreement, or in such other form as may be agreed in
writing by NB 3 and Optionee prior to Optionee's delivery of the Notice of
Exercise (the "Assignment of Wastewater Capacity"). Optionee shall agree to
and accept such assignment as indicated in the Assignment of Wastewater
Capacity.
7. ESCROW.
(a) OPENING. Immediately upon or (at the request of Optionee)
before delivering the Notice of Exercise, NB 3 and Optionee shall open an
escrow account ("Escrow") with Title Guaranty Escrow Services, Inc. (main
office - 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx) ("Escrow Agent"), for the
transaction pursuant to this Agreement. Delivery to Escrow Agent of a fully
executed copy of this Agreement shall constitute the opening of Escrow.
This Agreement shall constitute joint escrow instructions to Escrow
Agent. NB 3 and Optionee agree to execute such additional instructions not
inconsistent with the provisions of this Agreement which may be required by
Escrow Agent. NB 3 and Optionee agree that, as between NB 3 and Optionee,
if there is any conflict between the terms of this Agreement and the
provisions of any additional escrow instructions required by Escrow Agent,
the terms of this Agreement shall control.
(b) CANCELLATION. If the Closing fails to occur due to NB 3's
default, including without limitation due to the failure of the conditions
set forth in subsections I I (a), (b) or (d) of this Agreement or due to
the failure of the conditions set forth in subsections I I (c) or (e) of
this Agreement for reasons within the reasonable control of NB 3, NB 3
shall pay all Escrow Cancellation Charges. If the Closing fails to occur
due to Optionee's default or due to the failure of the conditions set forth
in subsections 11(c) or (e) of this Agreement for reasons within the
reasonable control of Optionee, Optionee shall pay all Escrow Cancellation
Charges. If the Closing fails to occur for any other reason, including
without limitation due to the failure of the conditions set forth in
subsections 1 I (c) or (e) for reasons beyond the reasonable control of NB
3 or Optionee, NB 3 and Optionee shall each pay one-half of the Escrow
Cancellation Charges. As used herein, the term "Escrow Cancellation
Charges" means all fees, charges, and expenses charged by Escrow Agent to
NB 3 or Optionee in connection with the Escrow, including all expenses
charged in connection with issuance of the Lot 3 Title Report and other
title matters. Nothing contained in this subsection 7(b) is intended to
limit either NB 3 or Optionee from exercising the remedies available upon
default as set forth in this Agreement.
8. CLOSING.
(a) CLOSING DATE. As used in this Agreement, the term "Closing"
means the time when the Deed is recorded at the Land Court, and all other
events or actions to occur on the Closing Date in accordance with this
Agreement (including without limitation those to occur upon satisfaction or
waiver of the conditions set forth in Section I1 of this Agreement) are
consummated. The "Closing Date" shall be the date that is fourteen calendar
days after the
7
Option is effectively exercised pursuant to this Agreement (or the first
business day thereafter if such date is not a business day).
(b) CLOSING DOCUMENTATION. On or before two business days prior to
the Closing Date, NB 3 and/or Optionee, as appropriate, shall deliver to
Escrow Agent the following documents:
(i) NB 3'S CLOSING DOCUMENTS. NB 3 shall deliver to Escrow
Agent the following documents (the "NB 3 Closing Documents"):
(A) the Deed, executed and acknowledged by NB 3 and
in recordable form;
(B) the Assignment of Wastewater Capacity, executed and
acknowledged by KDC;
(C) the Lot 3 Unit Count Declaration (as defined in
Section 14(c) below), executed and acknowledged by NB 3 and in
recordable form;
(D) the Assignment of SMA Requirements Agreement (as
defined in Section 14(b) below), executed and acknowledged by
NB 3;
(E) the Assignment of Water Quality Monitoring Right of
Entry (as defined in Section 15 below), executed and acknow-
ledged by NB 3;
(F) the Trade Name License Agreement (as defined in
Section 36 below), executed by the Service Xxxx Xxxxxx (as
defined in Section 36 below);
(G) such affidavit and indemnity, executed and
acknowledged by NB 3, in such form as shall be reasonably
agreed by NB 3 and the title company to cause the title company
to delete from the title policy, if any, all exceptions for
mechanics', materialmen's and similar liens and leases,
occupancy agreements and parties in possession (excepting the
Water Quality Monitoring Right of Entry (as defined in Section
10 (c)(xvii) below) the Xxx 0/Xxx 0 Xxxxxx Xxxxxxx Construction
Agreement (as defined in Section 10 (c)(xxi) below), and those
relating to use of the Public Open Space Area pursuant to the
Public Open Space Declaration (as defined in Section 10(c)(v)
below), and further excepting any liens which may affect the
Property relating to or as a result of Optionee's activities on
the Property, pursuant to Section 10 of this Agreement or
otherwise);
(H) the NB 3 Certificates (as defined in Section 18(a)
below);
8
(I) a certificate of the corporate secretary of the
Managing Member (as defined in Section 18(a) below), stating
that the NB 3 Resolutions (as defined in Section 18 (a) below)
were duly adopted by the Managing Member's board of directors
and evidencing the incumbency of the officers executing this
Agreement and the NB 3 Closing Documents on behalf of the
Managing Member, as NB.3's managing member;
(J) a certificate of good standing from the State of
Hawaii Department of Commerce and Consumer Affairs showing KDC
to be duly authorized to do business in the State of Hawaii and
in good standing under the laws of the State of Hawaii;
(K) a certificate of the corporate secretary of KDC
stating that its board of directors has duly adopted
resolutions authorizing the execution, acknowledgement and
delivery of, and the performance of such corporation's
obligations under, the Assignment of Wastewater Capacity
and evidencing the incumbency of the officers acting on behalf
of such corporation;
(L) such other evidence of the authority of NB 3, the
Managing Member, KDC, the Service Xxxx Xxxxxx and/or their
respective members, officers and representatives acting on
their behalf as the title company may reasonably request in
connection with Closing;
(M) an affidavit or certification, executed by NB 3, in
compliance with Internal Revenue Code, Section 1445(c) and the
applicable regulations;
(N) either (i) a properly executed Hawaii Form N-289
certifying that NB 3 is a Hawaii resident or NB 3 has a
permanent place of business in Hawaii or is qualified to do
business in Hawaii, or (ii) a certificate or other evidence as
contemplated by the State Withholding Provisions (as defined
in subsection 8(c) below).
If NB 3 fails to deliver any such Form N-289 or other
evidence, Optionee shall not be excused from its obligation to
consummate the transactions contemplated herein, but rather may
deduct and withhold from the Purchase Price an amount equal to
five percent (5%) of the sales price of the Hawaii real
property conveyed in connection with the transactions
contemplated herein, as defined and required by the State
Withholding Provisions. As described in subsection 8 (c) below,
any amount so withheld shall be deemed to have been paid by
Optionee as a part of the Purchase Price. Should NB 3 deliver
evidence to Optionee that the Hawaii Department of Taxation has
authorized a partial or total reduction
9
in the amount required to be withheld from the Purchase Price
pursuant to the State Withholding Provisions, Optionee may
withhold only the amount required by the Department of Taxation
to be withheld, if any, and any amount so withheld shall be
deemed to have been paid by Optionee as part of the Purchase
Price;
(O) a tax clearance certificate from the Hawaii
Department of Taxation, in compliance with Hawaii Revised
Statutes Section 237-43;
(P) the Fill Agreement (as defined in Section 14(f)
below), executed by PMCo (as defined in Section 14(f) below)
and/or such of the Amfac-Related Entities (as defined in
Section 20 below) as is applicable; and
(Q) such other documents or instruments as the title
company may reasonably request to consummate Closing in
accordance with this Agreement.
(ii) OPTIONEE'S CLOSING DOCUMENTS. Optionee shall deliver to
Escrow Agent the following documents (the "Optionee Closing
Documents"):
(A) the Deed, executed and acknowledged by Optionee (or
the Permitted Assignee or Successor, as those terms are
hereinafter defined, as applicable) and in recordable form;
(B) the Assignment of Wastewater Capacity, executed and
acknowledged by Optionee (or the Permitted Assignee or
Successor, as applicable);
(C) the Lot 3 Unit Count Declaration, executed and
acknowledged by Optionee (or the Permitted Assignee or
Successor, as applicable) and in recordable form;
(D) the Assignment of SMA Requirements Agreement,
executed and acknowledged by Optionee (or the Permitted
Assignee or Successor, as applicable);
(E) the Assignment of Water Quality Monitoring Right of
Entry, executed and acknowledged by Optionee (or the Permitted
Assignee or Successor, as applicable);
(F) the Trade Name License Agreement, executed by
Optionee (or the Permitted Assignee or Successor, as
applicable);
10
(G) the Optionee Certificates (as defined in Section
18(b) below);
(H) a certificate of the corporate secretary of the
General Partner (as defined in Section 18(b) below) stating
that Optionee's Resolutions (as defined in Section 18 (b)
below) were duly adopted by the General Partner's board of
directors and evidencing the incumbency of the officers
executing this Agreement and the Optionee Closing Documents on
behalf of the General Partner, as Optionee's general partner;
(I) If the Permitted Assignee or Successor that takes
title to the Property (or its general partner or managing
member or the General Partner) is a corporation, a certificate
of the corporate secretary of each such corporation stating
that the Optionee Resolutions were duly adopted by the board of
directors of each such corporation and evidencing the
incumbency of the officers executing the Optionee Closing
Documents on behalf of each such corporation;
(J) such other evidence of the authority of Optionee or
the Permitted Assignee or Successor and/or their respective
officers and representatives as the title company or NB 3 may
reasonably request in connection with this Agreement and
Closing;
(K) the Fill Agreement, executed by Optionee (or the
Permitted Assignee or Successor, as applicable); and
(L) such other documents or instruments as the title
company may reasonably request to document and consummate
Closing in accordance with this Agreement.
(c) CLOSING OF ESCROW. On the Closing Date, if the conditions
precedent set forth in Section 11 of this Agreement are satisfied or waived
in writing by the party benefiting from such conditions, Escrow Agent shall
disburse to NB 3 the Purchase Price (less the Deposit to the extent the
Deposit was earlier disbursed to NB 3 pursuant to Section 5(b) above, and
also less NB 3's share of the closing costs, Escrow Agent's fees, and
applicable prorated items according to Section 9 of this Agreement), shall
record the Deed and the Lot 3 Unit Count Declaration at the Land Court, and
shall deliver the NB 3 Closing Documents to Optionee and the Optionee
Closing Documents to NB 3. NB 3 acknowledges and agrees that Optionee may
be required to withhold a portion of the Purchase Price pursuant to Section
235-68 of the Hawaii Revised Statutes (the "State Code") (Section 235-68 of
the State Code, together with any regulations now or hereafter promulgated
thereunder, being collectively referred to herein as the "State Withholding
Provisions"). Any amount properly so withheld by Optionee, in accordance
with subsection 8(b)(i)(O) above, shall be deemed to have been paid by
Optionee as part of the Purchase Price.
11
(d) POSSESSION. Possession of the Property shall be delivered to
Optionee at Closing, subject only to such rights to the Property
constituting or arising out of the Permitted Exceptions.
9. CLOSING COSTS AND PRORATIONS. Except as otherwise specifically
provided in this Agreement, Optionee shall be responsible for all closing
costs incurred by Optionee, and NB 3 shall be responsible for all closing
costs incurred by NB 3, including each of their respective attorney's fees.
(a) NB 3's CLOSING COSTS. At Closing (if not earlier paid), NB 3
shall pay the following:
(i) the cost of the Lot 3 Title Report and the cost of the
base (i.e., standard coverage) portion of the title policy referenced
in Section 6(c) of this Agreement, if any (excluding the cost of any
extended coverage or endorsements);
(ii) recording fees and other costs, if any, for the release
of the Property from all Monetary Liens, including without limitation
(A) Additional Security Mortgage, Security Agreement, and Financing
Statement dated November 1, 2000, recorded at the Bureau of
Conveyances of the State of Hawaii (the "Bureau") as Document No.
2000-156571 and at the Land Court as Document No. 2662799, as
amended, and (B) Mortgage, Security Agreement and Financing Statement
dated November 14, 2002, recorded at the Bureau as Document No.
2002-203004 and at the Land Court as Document No. 2860723, and
(C) UCC Financing Statement recorded at the Bureau as Document
No. 2002-203005 (collectively, the "Amfac Mortgages");
(iii) recording fees and other costs, if any, for any releases,
discharges or other curative documents or actions which NB 3 commits
to deliver and/or take in accordance Section 6(b) of this Agreement;
(iv) any rollback taxes and special assessments assessed
against the Property as of the Closing Date or payable at Closing in
connection with the transfer of the Property to Optionee;
(v) any conveyance tax payable in connection with the sale by
NB 3 of the Property to Optionee; and
(vi) one-half (%2) of Escrow Agent's fees.
12
(b) OPTIONEE'S CLOSING COSTS. At Closing, Optionee shall pay the
following:
(i) all costs of any extended coverage (ALTA or otherwise) or
endorsements under the title policy, if any, as well as all costs of
any additional policy or policies of title insurance requested by
Optionee or Optionee's lender, if any, in connection with this
transaction, and any endorsements or extended coverage thereto;
(ii) all costs and charges in connection with any survey or
staking of the Property requested by Optionee or Optionee's lender,
if any, in connection with this transaction;
(iii) all recording fees (except as otherwise specified in
Section 9(a) above); and
(iv) one-half (1/2) of Escrow Agent's fees.
(c) OTHER CLOSING COSTS. Escrow Agent shall apportion all other
closing costs, if any, in a manner customary for real estate transactions
of this nature in the State of Hawaii.
(d) REAL PROPERTY TAXES. All real property taxes applicable to the
Property (other than rollback taxes and special assessments, if any) shall
be prorated between NB 3 and Optionee as of the Closing Date. If the
current year's taxes have not been determined as of the Closing Date,
proration shall be based on the previous year's taxes, with such proration
to be final in all respects.
(e) OTHER PRORATIONS. Other customary prorations, if any, shall be
prorated between NB 3 and Optionee as of the Closing Date.
10. DUE DILIGENCE PERIOD. Optionee shall be entitled to a period
of time (the "Due Diligence Period") to investigate and evaluate, at
Optionee's expense, the title and condition of the Property, the
suitability of the Property for Optionee's intended purposes, and all other
matters relevant to Optionee's acquisition, ownership, development, and use
of the Property. The Due Diligence Period shall begin on the Effective Date
and expire upon Optionee's delivery of the Notice of Exercise or any
earlier termination of this Agreement.
(a) During the Due Diligence Period, provided that Optionee is not
in default under this Agreement, Optionee shall have the right, subject to
the provisions of this Section 10 and at Optionee's sole cost and expense,
to conduct such independent investigations, including soils tests, surveys,
environmental site assessments, and other customary engineering tests and
physical examinations of the Property, development or other permit analyses
and feasibility studies, as Optionee, in its discretion, deems necessary or
appropriate concerning Optionee's ownership and intended use or development
of the Property or the suitability of the Property for use or development.
Prior to conducting any tests, surveys, assessments, or other physical
13
examinations on or otherwise affecting the Property before Closing,
Optionee shall notify NB 3 of Optionee's intent to conduct such
examinations, and of the nature and extent thereof, and shall obtain NB 3's
written consent (which consent shall not be unreasonably withheld or
delayed) prior to the commencement of any such physical examination.
(b) Provided that Optionee is not in default under this Agreement,
NB 3 shall grant to Optionee and its agents a nonexclusive license to enter
upon the Property, during the Due Diligence Period, for the purpose of
conducting tests, surveys, assessments, and other physical examinations on
or otherwise affecting the Property pursuant to this Section 10. Prior to
any such entry by Optionee on the Property, NB 3 and Optionee shall execute
a right-of-entry agreement (the "Right-of-Entry Agreement") in the form
attached as EXHIBIT "6" to this Agreement, which Right-of-Entry Agreement
shall contain, among other things, insurance requirements and Optionee's
release and indemnification of NB 3 and Amfac-Related Entities. Optionee
agrees to and shall comply with all of the terms and conditions in the
Right-of-Entry Agreement.
(c) By signing this Agreement, Optionee acknowledges that, in
addition to all other due diligence examinations and investigations
performed or to be performed by or on behalf of Optionee, and Optionee's
knowledge of the Property derived therefrom, Optionee is specifically aware
of the following items relating to or potentially affecting the Property,
and, prior to Optionee's delivery of the Notice of Exercise, shall have
reviewed, considered and, upon delivery of the Notice of Exercise, accepted
and agreed to the effects thereof on Optionee's purchase, acquisition,
ownership and intended use, development and sale of the Property:
(i) 1988 NORTH BEACH SMA. Special Management Area Use Permit
and Shoreline Setback Variance (88-SMI-023, 88/SSV-002) issued
by the County of Maui Planning Commission (Planning Director's
Reports dated May 24, 1988 and July 19, 1988, and Supplemental
Director's Report dated July 19, 1988, adopted by the County of
Maui Planning Commission at its meeting on July 19, 1988 as its
Findings of Fact, Conclusions of Law, Decision and Order), with
respect to land generally described therein as the Kaanapali North
Beach properties (the "Kaanapali North Beach Properties"), of
which the Property is part (the "1988 North Beach SMA"). Optionee
acknowledges having received a copy of the 1988 North Beach SMA.
(ii) 1998 KOR SMA SETTLEMENT AGREEMENT. Settlement Agreement
dated September 29, 1998, between Kaanapali North Beach Venture,
Amfac Property Investment Corp. dba Amfac Maui, Kaanapali Ownership
Resorts, L.P., and Amfac/JMB Hawaii, LLC, as Developers, and Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxx
Xxxxxxx and Xxxxxx Xxxxxxx, as Intervenors (the "1998 KOR SMA
Settlement
14
Agreement"). Optionee acknowledges having received a copy of
the 1998 KOR SMA Settlement Agreement.
(iii) 1998 KOR SMA. Special Management Area Use Permit
(SM 1970006) issued by the County of Maui Planning Commission
(County of Maui Planning Commission Findings of Fact, Conclusions of
Law, Decision and Order (Docket No. 88/SMI-023, 88/SSV-002,
SM970006), effective December 14, 1998) (the "1998 KOR SMA").
Optionee acknowledges having received a copy of the 1998 KOR SMA.
(iv) SHORELINE SETBACK AREA DECLARATION. Unilateral and
Irrevocable Declaration of Perpetual Rights and Uses and Perpetual
Restrictions (Xxxxx Xxxxx Xxxxxxxxx Xxxxxxx Xxxx) dated December 29,
1998, recorded at the Bureau as Document No. 99-005138 and at the
Land Court as Document No. 2513420; Amendment to Unilateral and
Irrevocable Declaration of Perpetual Rights and Uses and Perpetual
Restrictions (Xxxxx Xxxxx Xxxxxxxxx Xxxxxxx Xxxx) dated December 6,
2000, recorded at the Bureau as Document No. 2000-170916 and at the
Land Court as Document No. 2668965 (the "Shoreline Setback Area
Declaration"). Optionee acknowledges having received a copy of the
Shoreline Setback Area Declaration.
(v) PUBLIC OPEN SPACE DECLARATION. Unilateral and
Irrevocable Declaration of Perpetual Rights and Uses and Perpetual
Restrictions (Xxxxx Xxxxx Xxxxxx Xxxx Xxxxx/Xxxxxxxxxx Xxxx)
dated December 29, 1998, recorded at the Bureau as Document
No. 99-005139 and at the Land Court as Document No. 2513421,
as amended by instrument dated December 6, 2000, recorded at the
Bureau as Document No. 2000-170915 and at the Land Court as
Document No. 2668964 (the "Public Open Space Declaration").
Optionee acknowledges having received a copy of the Public Open
Space Declaration.
(vi) NORTH BEACH UNIT COUNT AND DRAINAGE DECLARATION.
Unilateral Declaration of Restrictions; Joinder Agreement (North
Beach Unit Count and Drainage) dated February 15, 2001, recorded at
the Bureau as Document No. 2001-022448 and at the Land Court as
Document Xx. 0000000 (xxx "Xxxxx Xxxxx Unit Count and Drainage
Declaration"). Optionee acknowledges that a copy of the North Beach
Unit Count and Drainage has been delivered to Optionee.
15
(vii) SMA REQUIREMENTS AGREEMENT. Kaanapali North Beach/
Kaanapali Ocean Resort SMA Requirements Agreement dated December 6,
2000, between Amfac Property Investment Corp., Kaanapali Ownership
Resorts, L.P., Amfac Property Development Corp., Pioneer Mill
Company, Limited, and SVO Pacific, Inc. (the "SMA Requirements
Agreement"); Assignment and Assumption of Kaanapali North
Beach/Kaanapali Ocean Resort SMA Requirements Agreement dated
December 21, 2000, between Amfac Property Investment Corp., Amfac
Hawaii, LLC, a Hawaii limited liability company ("AHI") and KDC;
Assignment and Assumption of Kaanapali North Beach/Kaanapali Ocean
Resort SMA Requirements Agreement dated November 22, 2002,
between XXX, XXX, XX Xxx 0, XXX, XX Lot 4, LLC, and NB 3;
Assignment and Assumption of Kaanapali North Beach/Kaanapali Ocean
Resort SMA Requirements Agreement; Agreement Regarding SMA
Requirement dated as of August 5, 2003, between the Lot 4
Seller and Optionee pursuant to the Xxx 0 Xxxxxxxx Xxxxxxxxx.
Optionee acknowledges having received copies of the SMA Requirements
Agreement and the referenced assignments.
(viii) XXX 0 XXXX XXXXX XXXXXXXXXXX. Xxxxxxxxxxx xx Xxxxxxxxx,
Conditions and Restrictions; Joinder dated December 6, 2000,
recorded at the Bureau as Document No. 2000-170918 and at the Land
Court as Document No. 2668974; Amendment to Declaration of Covenants,
Conditions and Restrictions Joinder dated January 31, 2003, recorded
at the Bureau as Document No. 2003-018974 and at the Land Court as
Document No. 2887174 (the "Lot 2 Unit Count Declaration"). Optionee
acknowledges having received a copy of the Lot 2 Unit Count
Declaration.
(ix) KOR UNIT COUNT DECLARATION. Declaration of Restrictions
(Unit Count) dated February 15, 2001, recorded at the Bureau as
Document No. 2001-032604 and at the Land Court as Document
No. 2688326 (the "KOR Unit Count Declaration"). Optionee
acknowledges having received a copy of the KOR Unit Count
Declaration.
(x) NORTH BEACH CCRs. Declaration of Covenants, Conditions,
Easements and Restrictions for Kaanapali North Beach dated
December 6, 2000, recorded at the Bureau as Document No. 2000
170917 and at the Land Court as Document No. 2668967; Designation of
Successor Declarant and Assignment of Declarant's Rights and
Interests Under Declaration of Covenants, Conditions, Easements and
Restrictions for Kaanapali North Beach dated
16
December 21, 2000, recorded at the Bureau as Document No. 2001-022804
and at the Land Court as Document Xx. 0000000 (xxx "Xxxxx Xxxxx
CCRs"). Optionee acknowledges having received a copy of the North
Beach CCRs.
(xi) NORTH BEACH CCRs SUPPLEMENTAL DECLARATION. Supplemental
Declaration to Declaration of Covenants, Conditions, Easements and
Restrictions for Kaanapali North Beach dated as of August 5, 2003,
recorded at the Bureau and at the Land Court (the "North Beach CCRs
Supplemental Declaration"), pursuant to the Xxx 0 Xxxxxxxx Xxxxxxxxx.
Optionee acknowledges having received a copy of the North Beach CCRs
Supplemental Declaration.
(xii) SHORELINE ZONE PLAN. Kaanapali North Beach Shoreline
Zone Plan, revised November 1997, Revision No. 2 December 1998,
approved by County of Maui Planning Commission at its January 26,
1999 meeting (the "Shoreline Zone Plan"). Optionee acknowledges
having received a copy of the Shoreline Zone Plan.
(xiii) EMPLOYEE HOUSING CONCEPT PLAN. Kaanapali North Beach
Employee Housing Concept Plan, revised January 1998 (the "Employee
Housing Concept Plan"). Optionee acknowledges having received a copy
of the Employee Housing Concept Plan.
(xiv) DRAINAGE MASTER PLAN. Drainage Master Plan Kaanapali --
North Beach (Mauka and Makai) dated April 2000, prepared by Sato &
Associates, Inc. (the "Drainage Master Plan"). Optionee acknowledges
having received a copy of the Drainage Master Plan.
(xv) RECREATIONAL AND PARK PLAN. Kaanapali North Beach
Recreational and Park Plan dated December 1990 (the
"Recreational and Park Plan"). Optionee acknowledges having received
a copy of the Recreational and Park Plan.
(xvi) DESIGN GUIDELINES. Design Manual Kaanapali Beach Resort,
North Beach (Revised December 1996), prepared by The Xxxxxxxx
Group, and approved by letter dated December 31, 1996, from Xxxxx X.
Xxxxx, Director of Planning, County of Maui (the "Design
Guidelines"). Optionee acknowledges having received a copy of the
Design Guidelines.
(xvii) WATER QUALITY MONITORING RIGHT OF ENTRY. License and
Right of Entry Agreement dated May 21, 2002, between KDC, AHI and
SVO Pacific, Inc. (the "Water Quality Monitoring Right of
17
Entry"); Partial Assignment and Assumption of License and Right of
Entry Agreement (Water Quality Monitoring) dated as of August 5,
2003, between the Lot 4 Seller and Optionee pursuant to the Xxx 0
Xxxxxxxx Xxxxxxxxx; Optionee acknowledges having received a copy of
the Water Quality Monitoring Right of Entry and the referenced
assignment.
(xviii) XXX 0 XXXX XXXXX XXXXXXXXXXX. Xxxxxxxxxxx xx
Xxxxxxxxxxxx (Xxx 0 Xxxx Xxxxx) dated as of August 5, 2003, recorded
at the Bureau and at the Land Court (the "Lot 4 Unit Count
Declaration"), made by Optionee for the benefit of NB 3 pursuant to
the Xxx 0 Xxxxxxxx Xxxxxxxxx. Optionee acknowledges having received a
copy of the Lot 4 Unit Count Declaration.
(xix) XXX 0 XXXXXXXXXXX XXXXXXXX. Declaration of Restrictions
(Permit Applications) dated as of August 5, 2003, recorded at the
Bureau and at the Land Court (the "Lot 3 Restrictive Covenant"), made
by NB 3 in favor of Optionee pursuant to the Xxx 0 Xxxxxxxx Xxxxxxxxx
Optionee acknowledges having received a copy of the Xxx 0
Xxxxxxxxxxx Xxxxxxxx.
(xx) GRANT OF LOT 4 ACCESS EASEMENT. Grant of Easement and
Agreement (Access, Entry Feature and Landscaping) dated as of
August 5, 2003, recorded at the Bureau and at the Land Court (the
"Grant of Lot 4 Access Easement"), between NB 3 and Optionee pursuant
to the Xxx 0 Xxxxxxxx Xxxxxxxxx. Optionee acknowledges having
received a copy of the Grant of Lot 4 Access Easement.
(xxi) XXX 0/XXX 0 XXXXXX XXXXXXX CONSTRUCTION AGREEMENT.
Xxx 0/Xxx 0 Xxxxxx Xxxxxxx Construction Agreement dated as of
August 5, 2003 (the "Lot 0/Xxx 0 Xxxxxx Xxxxxxx Construction
Agreement"), between the Lot 4 Seller and Optionee pursuant to
the Xxx 0 Xxxxxxxx Xxxxxxxxx. Optionee acknowledges having received a
copy of the Xxx 0/Xxx 0 Xxxxxx Xxxxxxx Construction Agreement.
(xxii) KAANAPALI WATER CORPORATION TARIFF. Kaanapali Water
Corporation Rules and Regulations Governing Water Service to
Consumers and Water Rate Schedules (KWC Tariff No. 1), effective
June 9, 1980 (the "KWC Tariff'). Optionee acknowledges having
received a copy of the KWC Tariff.
18
(xxiii) PARTIAL CANCELLATION OF RESERVED EASEMENT RIGHTS.
Partial Cancellation of Reserved Easement Rights dated as of
August 5, 2003, recorded at the Bureau (the "Partial Cancellation of
Reserved Rights"), made by certain of the Amfac-Related Entities
pursuant to the Xxx 0 Xxxxxxxx Xxxxxxxxx. Optionee acknowledges
having received a copy of the Partial Cancellation of Reserved
Rights.
(xxiv) AIRPORT OPERATIONS; RESIDUE. Portions of the Property
and adjacent properties were previously used as an airport and, thus,
have been subject to extensive activities related to the operation of
an airport. As such, the Property may have been exposed to oils,
fuels, and other residue from airport activities and operations, any
of which may have a present and continuing effect on the Property
and/or adjacent properties.
(xxv) AGRICULTURAL OPERATIONS, RESIDUE. Portions of the
Property and adjacent properties have been subject to extensive
agricultural production and related agricultural activities, and, as
such, the Property may have been exposed to organic waste,
herbicides, and other residue from agricultural activities and
operations, any of which may have a present and continuing effect on
the Property and/or adjacent Properties. Optionee acknowledges having
received a copy of a list, prepared by Hawaiian Agricultural
Research Corporation, previously known as Hawaiian Sugar
Planters' Association, of chemicals historically used by sugar
plantations in the operation of cane fields. NB 3 makes no
representations or warranties, however, that all or any of such
chemicals have been used on the Property, or that the Property has
not been exposed to chemicals not identified or included on the
list.
Optionee further acknowledges that, with respect to the foregoing
items, NB 3 does not make any warranties or representations concerning such
matters or the completeness or accuracy thereof, except only as expressly
set forth in Section 18(a)(xii) of this Agreement.
(d) During the Due Diligence Period, provided that Optionee is not
in default under this Agreement, NB 3 shall make available to Optionee (for
review and copy, at Optionee's expense), during regular business hours and
at such locations as NB 3 shall reasonably determine, such studies,
reports, correspondence, agreements, documents, and other items (excluding
privileged or confidential items, if any) materially relating to the
Property and known by Xxxxxx X. Xxxxxxx, senior vice president of NB 3,
and/or Xxxx X. Xxxxxx, vice-president of NB 3 (after reasonably diligent
and good faith investigations of the files and records of NB 3, KDC, and
AHI, and reasonably diligent inquiries of the current employees and
consultants of
19
NB 3, KDC, and AHI responsible for the management, operation and
development of, and records relating to, the Property) to be in the custody
or possession of NB 3, KDC, or AHI, and such other items (excluding
privileged or confidential items, if any) reasonably requested by Optionee
and reasonably obtainable by NB 3 during the Due Diligence Period (at no
cost to NB 3, except to the extent the cost is paid directly by Optionee).
Optionee acknowledges that with respect to such items, NB 3 does not make
any warranties or representations concerning such items or the completeness
or accuracy thereof, except only as expressly set forth in Section 18
(a)(xii) of this Agreement.
Upon the written request of Optionee, NB 3 shall prepare and deliver,
to such individuals, entities and/or authorities as Optionee shall
reasonably identify as having information materially relating to the
Property and Optionee's investigation thereof pursuant to this Agreement, a
letter authorizing each of such parties to communicate and cooperate with
Optionee, at Optionee's expense, with respect to Optionee's investigation
of the Property pursuant to this Agreement, to the extent of such party's
knowledge and information; provided, however, that such letter shall
specifically exclude from any authorized communication privileged or
confidential items.
As used in this Agreement, the phrase "privileged or confidential
items" means any documents or other materials or information: (i) that are
or may reasonably be considered privileged communications between NB 3 (or
any of the Amfac-Related Entities) and its counsel; (ii) that are subject
to a presently effective confidentiality agreement; (iii) that contain
information about assets or business activities of NB 3 or any of the
Amfac-Related Entities that cannot reasonably be separated from information
about the Property; or (iv) that are appraisals, valuations or any
information about or relating to inquiries or offers to purchase the
Kaanapali North Beach Properties, including the Property, or any part
thereof.
(e) Upon Optionee's delivery of the Notice of Exercise, Optionee
will be deemed to have satisfied itself with the condition of the Property
(as set forth in Section 10 below) and to have waived any right to
terminate this Agreement based on the condition of the Property or such
other matters referenced in this Section 10 or in Section I 1 below. Upon
any termination of this Agreement, all studies, reports, and information
obtained by Optionee from or through NB 3 concerning the Property, or
otherwise provided by NB 3 pursuant to this Agreement, shall be immediately
returned by Optionee to NB 3.
(f) Optionee shall have the right to contact and communicate with
appropriate County officials and employees regarding potential development
of the Property; provided, however, that until the later to occur of
Closing and release of the Lot 4 Mortgage (as defined in Section 19(a)
below), Optionee will use reasonable and diligent good faith efforts to
consult with, and keep NB 3 advised, as to material contacts or
communication with such officials and employees relating to or affecting
entitlements for, or development of, the Property or Lot 4.
11. CONDITIONS TO CLOSING. Without limiting the terms of
Section 10 above and Section 19(b) below, Optionee's obligation to purchase
the Property pursuant to this Agreement is conditioned upon each of the
following:
20
(a) NB 3's representations and warranties contained in or
made pursuant to this Agreement being true and accurate as of the
Closing Date, and NB 3 not being otherwise in material default under
this Agreement.
(b) The state of NB 3's title at Closing being as required by
this Agreement, and NB 3 having possession of the Property on the
Closing Date subject only to such rights to the Property constituting
or arising out of Permitted Exceptions.
(c) The title company shall confirm as of Closing its
intention to issue the title policy in accordance with the title
commitment, if any, obtained by Optionee in accordance with Section
6(c) above; provided that Optionee shall act in diligent good faith
to cause such confirmation by the title company, and shall not cause
through its act or omission any rejection by the title company of the
title commitment or such confirmation.
(d) NB 3 shall have executed, acknowledged where appropriate,
and/or delivered to the Escrow Agent the NB 3 Closing Documents, in
accordance with this Agreement.
(e) There shall occur no material adverse change in the
physical condition of the Property from the date that Optionee
effectively exercises the Option through the Closing Date.
If any of the conditions set forth in this Section 11 are not
satisfied as of the Closing Date, and provided Optionee is not then in
default hereunder, Optionee shall have the right to: (i) waive the
condition(s) in question and proceed with Closing in accordance with this
Agreement; or (ii) terminate this Agreement by written notice to NB 3;
provided, however, that such right shall be cumulative with, and not to the
exclusion of, any other rights and remedies of Optionee under this
Agreement arising out of the failure to satisfy any such condition. Upon
termination of this Agreement in accordance with this Section 11 due to the
failure of the conditions set forth in subsections 11 (c) or (e), for
reasons beyond the reasonable control of NB 3, both NB 3 and Optionee shall
be released from all further obligations under this Agreement, except for
the continuing indemnity obligations under the Right-of-Entry Agreement and
Section 30 of this Agreement and the confidentiality obligations under
Section 31 of this Agreement. Upon termination of this Agreement in
accordance with this Section 11 for any reason, the Deposit (including
interest, if any, accrued thereon prior to disbursal of the Deposit to NB
3) shall be returned to Optionee, and all studies, reports and information
obtained by Optionee from or through NB 3 concerning the Property or
otherwise provided by NB 3 pursuant to this Agreement, shall be immediately
returned by Optionee to NB 3.
12. CONDITION OF PROPERTY "AS IS".
(a) ACKNOWLEDGMENT OF PROPERTY CONDITION. Upon Optionee's delivery
of the Notice of Exercise, Optionee acknowledges that it will have made
such independent investigations as Optionee deems necessary or appropriate
concerning Optionee's intended use, development and/or sale of the Property
or the suitability of the Property for use, development
21
and/or sale, including, but not limited to, investigations, and analyses of
applicable Regulations (as defined in subsection 12(b) below) and Permits
(as defined in subsection 12(b) below).
(b) OPTIONEE ACQUIRING PROPERTY "AS IS". Excepting only the
representations and warranties of NB 3 as and to the extent expressly set
forth in Section 18(a) of this Agreement ("NB 3's Representations and
Warranties"), Optionee is relying solely upon its own inspection,
investigation, and analyses of the Property in entering into this Agreement
and consummating the Closing, and Optionee is not relying in any way upon
any representations, statements, agreements, warranties, studies, reports,
descriptions, guidelines, or other information or material furnished by
NB 3 or its representatives, whether oral or written, express or implied,
of any nature whatsoever. Subject only to NB 3's Representations and
Warranties, OPTIONEE IS ACQUIRING THE PROPERTY "AS IS," in its state and
condition as of Closing. Subject only to NB 3's Representations and
Warranties, no patent or latent condition affecting the Property in any way
shall affect Optionee's obligations hereunder, nor shall any such condition
give rise to any right of damage or rescission against NB 3 or any Amfac-
Related Entities. Such conditions may include, without limitation, the
effect of (including non-compliance with) any applicable laws, statutes,
rules, regulations, ordinances, limitations, restrictions or requirements
concerning the use, density, location, construction or suitability for use
or development of the Property or any existing or proposed development or
condition thereof (collectively the "Regulations"), including but not
limited to zoning, land use, development plan, subdivision, building,
construction, Hazardous Materials (as defined below), archaeological,
historical, environmental, endangered or threatened species, or other such
Regulations and any Regulations governing the maintenance, operation,
nonuse or closing of groundwater xxxxx, the diversion, discharge or runoff
of water, or any other matters relating to water use, consumption and
development on or affecting the Property or other properties; the necessity
or availability of any special management area permits, development plan
amendments, rezoning, zoning variances, conditional use permits, building
permits, environmental impact statements, subdivision maps, condominium
public reports, timeshare or subdivision registrations, and all other
governmental permits, approvals, licenses, consents, authorizations,
waivers or acts (collectively the "Permits"); the necessity and existence
of all dedications, fees, charges, costs, or assessments which may be
imposed by the County, the State of Hawaii, and any other governmental or
quasi governmental agencies or entities in connection with use or
development of the Property; the economic value of the Property; the size,
dimensions, location, and topography of the Property, including its
location within any flood zone, tsunami inundation zone or designated
wetlands; the availability or adequacy of access to the Property, or of
water, sewage, gas, electrical, or other utilities serving the Property;
the presence or adequacy of infrastructure or other improvements on, near,
or concerning the Property; the extent or condition of any grading or other
site work relating to the Property or as may be hereafter required for any
future development or redevelopment of the Property; any surface, soil,
subsoil, geologic, drainage, or groundwater conditions or other physical
conditions and characteristics of or affecting the Property, such as
hazardous ground conditions, aircraft overflight, traffic, climate,
drainage, air, water or minerals; water rights, if any, appertaining to the
Property, including the continuation or validity of any past or present
diversion, use and/or consumption of water on, from or affecting the
Property; the identity of the Property as a habitat for endangered or
threatened species of fauna or flora; the
22
existence on or under the Property of any "Hazardous Materials," which, as
used in this Agreement, shall include any and all substances regulated by,
or defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," or "toxic substances" under any
and all federal, state or local environmental, water pollution, hazardous
substance, toxic material or waste law, ordinance, rule, regulation,
judgment, order, decree or injunction applicable to the Property,
including, without limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Section 6901, et seq, the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Section 1801, et seq., the Clean Water Act, as amended,
33 U.S.C. Section 1251, et seq., the Toxic Substances Control Act. as
amended, 15 U.S.C. Section 2601 et seq. the Safe Drinking Water Act, as
amended, 42 U.S.C. Sections 300f through 300j, and the Hawaii Environmental
Response Law, Hawaii Revised Statutes, Chapter 128D (collectively
"Hazardous Materials Laws"); the existence or condition of any surface or
underground storage tanks on or under the Property; all items and matters
disclosed by the Boundary Survey or any other survey of the Property; and
all other matters concerning the condition, use, development, or sale of
the Property. Excepting only NB 3's Representations and Warranties, NB 3
makes no representation or warranty concerning the Property or any of the
matters described above.
13. NORTH BEACH CCRS. Optionee acknowledges that the Property
(together also with "Lot I", "Lot 2", "Lot 4", and "Kahekili Park" of the
Kaanapali North Beach Properties, approximately as shown on the map
attached as EXHIBIT "7" to this Agreement) is subject to the North Beach
CCRs, and subject to the jurisdiction of the Kaanapali North Beach Master
Association, Inc. (the "North Beach Association") formed pursuant to the
North Beach CCRs, and related articles of incorporation and bylaws.
Optionee, for itself and on behalf of its successors and assigns, agrees,
as of Closing, to comply with, satisfy, and be bound by all of the terms,
conditions and obligations (including, without limitation, assessment
payment obligations) in or under the North Beach CCRs as and to the extent
applicable to ownership, development, and/or use of the Property. Optionee
further acknowledges that KDC (being an affiliate of NB 3) is the current
holder of the interests of the "Declarant" in and under the North Beach
CCRs. Optionee further acknowledges that, in accordance with the Xxx 0
Xxxxxxxx Xxxxxxxxx and as provided in the North Beach CCRs Supplemental
Declaration, the "Land Points" for the Property and Xxx 0 xxxxx xxx Xxxxx
Xxxxx XXXx are subject to reallocation among the Property and Lot 4 in
recognition of the density implications of development of the Property and
Lot 4.
14. USE AND DEVELOPMENT OF PROPERTY.
(a) PERMITS AND REGULATIONS. Optionee shall be responsible for
obtaining, at its cost and expense, all Permits (as defined in Section
12(b) above) which may from time to time be required for Optionee's use,
development or sale of the Property, or portions thereof, including the
payment or other satisfaction of all fees, costs, charges, exactions, and
other impositions in connection with such Permits, and for compliance, at
its cost and expense, with all Regulations (as defined in Section 12(b)
above) which may from time to time relate or apply to Optionee's use,
development or sale of the Property. NB 3 makes no representations,
assurances, or
23
warranties in any way relating to the necessity or availability of any
Permits which may be required or desired in connection with any use,
development or sale of the Property, including any subdivision of the
Property or any other proposed use or development of the Property by
Optionee. NB 3 shall not be required to provide any assistance or support
for, or joinder in, any application or action by Optionee relating to
Permits required or desired for Optionee's use, development or sale of the
Property, or otherwise in any way relating to Optionee's use of the
Property; provided only that NB 3 agrees that it will not actively oppose,
object to, intervene in, or otherwise interfere with any application for
any and all Permits as Optionee requires for development of the Property
consistent and in compliance with this Agreement, the North Beach CCRs, and
the SMA Requirements Agreement, and otherwise consistent with permitted or
accessory uses in residential, resort or hotel land use or zoning
districts.
(b) SMA REQUIREMENTS. Optionee acknowledges that the Kaanapali
North Beach Properties, including the Property, or applicable portions
thereof, are subject to the terms, conditions and requirements contained in
the following (collectively, the "SMA Requirements"): The 1988 North Beach
SMA; the 1998 KOR SMA Settlement Agreement; the 1998 KOR SMA; the Shoreline
Setback Area Declaration; the Public Open Space Declaration; the North
Beach Unit Count and Drainage Declaration; and the Lot 2 Unit Count
Declaration. Optionee, for itself and on behalf of its successors and
assigns, agrees, as of Closing and at its sole responsibility and expense,
to comply with and satisfy all SMA Requirements relating or applicable to
ownership, development, and/or use of the Property. Without limiting the
foregoing, at Closing all rights, interests and obligations of NB 3 under
the SMA. Requirements Agreement, to the extent such rights, interests and
obligations pertain to the Property, shall be assigned to Optionee, and
Optionee shall accept and assume all such rights, interests, and
obligations of NB 3 in and under the SMA Requirements Agreement, to the
extent they relate or are applicable to the Property, pursuant to an
agreement (the "Assignment of SMA Requirements Agreement") substantially in
the form attached as EXHIBIT "8" to this Agreement or in such other form as
may be agreed in writing by NB 3 and Optionee prior to Optionee's delivery
of the Notice of Exercise. Further without limiting the foregoing or
subsection 14 (a) above, Optionee shall be responsible for complying with
and satisfying, at its expense, any and all affordable housing and/or
employee housing requirements relating to the Property, pursuant to the SMA
Requirements or as may otherwise be imposed in connection with development
and/or use of the Property.
(c) LOT 3 UNIT COUNT DECLARATION. Optionee shall not, without the
prior written consent of NB 3 (which consent may be withheld or conditioned
at the sole and absolute discretion of NB 3), develop, or construct, or
otherwise apply for or obtain any Permit for the development or
construction of, more than 550 Units (as defined in Section 4(a)(ii) above)
on the Property. Optionee, as the owner of Lot 3, further shall not,
without the prior written consent of the Lot 4 Seller (which consent may be
withheld or conditioned at the sole and absolute discretion of the Lot 4
Seller), amend the Lot 4 Unit Count Declaration in any way which will or
may reduce the Unit count limitation recited therein to less than 700
Units, prior to a full release of the Lot 4 Mortgage in accordance with the
terms thereof. At Closing, NB 3 and Optionee shall execute, deliver, and
record a declaration of restrictions (the "Lot 3 Unit Count Declaration"),
substantially in the form attached as EXHIBIT "9" to this Agreement or in
such
24
other form as may be agreed in writing by NB 3 and Optionee prior to
Optionee's delivery of the Notice of Exercise, reciting the provisions of
this subsection 14(c) and subsection 14(e) below as covenants running with
and encumbering the Property for the benefit of NB 3 and the Xxx 0 Xxxxxx.
(x) INDEMNITY. Optionee agrees to and shall indemnify, defend and
hold harmless NB 3 and Amfac-Related Entities from and against any and all
claims, demands, losses, liabilities, obligations, penalties, fines,
actions, causes of action, judgments, suits, proceedings, costs,
disbursements, and expenses (including, without limitation, reasonable
attorneys' and experts' reasonable fees and costs) of any kind or nature
whatsoever which may at any time be imposed upon, incurred or suffered by,
or asserted or awarded against, NB 3 or any Amfac Related Entities related
to or arising out of any failure by Optionee after the Closing to satisfy
and comply with the SMA Requirements, the SMA Requirements Agreement, the
North Beach CCRs, and the Water Quality Monitoring Right of Entry, as and
to the extent they relate or are applicable to the Property, or the Lot 3
Unit Count Declaration and the Assignment of SMA Requirements Agreement.
(e) NO OPPOSITION TO LOT 4 DEVELOPMENT. In the event the Lot 4
Seller or any of the Amfac-Related Entities shall become the owner of Lot
4, either through foreclosure of the Lot 4 Mortgage or pursuant to a deed
in lieu of such a foreclosure, Optionee agrees and covenants that it shall
not oppose, object to, intervene in, or otherwise interfere with any
application for any and all permits, consents or approvals from such
governmental or quasi-governmental authorities as the Lot 4 Seller or the
applicable Amfac-Related Entities, their respective successors and assigns,
may deem necessary or desirable for the development of Lot 4 for purposes
consistent with permitted or accessory uses in residential, multiple
family, hotel, resort, resort commercial, neighborhood business, or similar
land use or zoning districts; provided, however, that the foregoing
covenant by Optionee shall not preclude Optionee from opposing, objecting
to, intervening in, or otherwise interfering with any application for any
such permit as and to the extent such permit would materially and adversely
affect or impact (i) the drainage for the Property, or (ii) the obligations
of Optionee under the SMA Requirements Agreement or any SMA Permit issued
by the County with respect to the Property.
(f) DELETED.
(g) PUBLIC OPEN SPACE DECLARATION. Optionee acknowledges that a
substantial (ten acre) portion of the Property (being Easement 257
affecting the Property) is subject to the Public Open Space Declaration and
contains the Public Open Space referenced in the North Beach CCRs.
Optionee, for itself and on behalf of its successors and assigns, agrees to
comply with, satisfy, and be bound by all of the terms, conditions and
obligations in or under the Public Open Space Declaration, as and to the
extent applicable to ownership, development and/or use of the Property.
Without limiting the foregoing, Optionee further acknowledges that access
to the Public Open Space Area is provided across the Property, and Optionee
covenants and agrees that it shall allow and provide for continued access
to the Public Open Space Area, in accordance
25
with the Public Open Space Declaration and the North Beach CCRs, and that
its use and development of the Property shall be subject thereto.
(h) XXX 0/XXX 0 XXXXXX XXXXXXX CONSTRUCTION AGREEMENT. Optionee
acknowledges that the Property is and shall be subject to the Xxx 0/Xxx 0
Xxxxxx Xxxxxxx Construction Agreement, pursuant to which certain roadway
improvements shall or may be constructed within Easement 267 affecting the
Property, for primary vehicular access between Honoapiilani Highway and Lot
4. Optionee further acknowledges and agrees that such construction may
occur prior to or after Closing, pursuant to and in accordance with the Xxx
0/Xxx 0 Xxxxxx Xxxxxxx Construction Agreement.
(i) DESIGN GUIDELINES. Optionee acknowledges that KDC has
prepared, and has provided to Optionee, a proposed update to the Design
Guidelines ("Draft Update") pursuant to the SMA Requirements Agreement.
Optionee further acknowledges and agrees that KDC intends to and may submit
(either prior to or after Closing) the Draft Update to the County, and that
the Draft Update may be revised prior to or in connection with such
submittal at the discretion of KDC (provided only that, unless this
Agreement has terminated, any such revisions shall be delivered to
Optionee, and any such revisions after Optionee's delivery of the Notice of
Exercise materially affecting development of the Property by Optionee shall
be subject to the prior approval of Optionee, which approval shall not be
unreasonably withheld or delayed).
15. WATER QUALITY MONITORING RIGHTS OF ENTRY. Pursuant to the
Water Quality Monitoring Right of Entry, SVO Pacific, Inc. ("SVOP"), as the
owner of Lot 1, has a nonexclusive license and right of entry upon the
Property, and NB 3 has nonexclusive license and right of entry upon Lot 1,
for the purpose of conducting certain water quality monitoring activities
in accordance with the 1998 KOR Settlement Agreement and the 1998 KOR SMA.
At Closing, NB 3 shall assign to Optionee, and Optionee shall assume and
accept from NB 3 all of its rights and obligations under the Water Quality
Monitoring Right of Entry as such rights and obligations relate to the
Property, by executing and delivering at Closing a document (the
"Assignment of Water Quality Monitoring Right of Entry"), substantially in
the form attached as EXHIBIT "10" to this Agreement or in such other form
as may be agreed in writing by NB 3 and Optionee prior to Optionee's
delivery of the Notice of Exercise. Optionee further agrees that it shall,
after Closing and at the request of NB 3, grant to the Lot 4 Seller, to the
extent of its interests in Lot 4, a nonexclusive license and right of entry
upon the Property for the purpose of conducting water quality monitoring
activities relating to development of Lot 4, in accordance with the 1998
KOR Settlement Agreement and the 1998 KOR SMA, on substantially the same
terms as provided in the Water Quality Monitoring Right of Entry.
16. [RESERVED]
17. ACKNOWLEDGMENT OF ADJACENT ACTIVITIES; WAIVER. Optionee
acknowledges that the Property and any improvements constructed thereon
have been, and/or may continue to be, affected periodically by noise, dust,
smoke, soot, ash, odor, noxious vapors, transmission of surface water
runoff, or other adverse environmental conditions and nuisances,
26
including but not limited to those attributable to winddrift and other
weather factors (hereafter called the "Surrounding Use Effects"),
attributable to historical or currently existing agricultural use of, and
operations on, the Property and/or lands in the vicinity of the Property,
which include, but are not limited to: (a) cane milling, burning,
harvesting, tending, as well as fertilization and pest and weed control;
(b) diversified agriculture operations; (c) cattle and other livestock
grazing; (d) quarrying; (e) grading, improvement and maintenance of
adjacent and surrounding properties, including roadways; (t) electrical
transmission lines and facilities within or in the vicinity of the
Property; and (g) irrigation of any and all surrounding lands with
reclaimed water, treated effluent, or other non-potable water sources
(hereafter called, collectively, the "Surrounding Operations"). Optionee,
for itself and its successors and assigns, hereby expressly acknowledges
the risks associated with such Surrounding Operations and the annoyances,
inconveniences, and Surrounding Use Effects and nuisances created thereby,
and expressly waives all rights to any claim against NB 3 and Amfac-Related
Entities arising out of or in connection with such activities, annoyances,
inconveniences and nuisances, including but not limited to (i) any right to
seek damages attributable thereto, or (ii) the abatement or elimination
thereof; and Optionee hereby further covenants and agrees for itself and
any person or entity claiming by or through it and their respective
successors and assigns, that neither NB 3 nor any of the Amfac-Related
Entities shall be responsible or liable to Optionee, or any person or
entity claiming by or through it and their respective successors and
assigns, for the consequences of the Surrounding Use Effects. Without
limiting the foregoing, Optionee further understands and acknowledges that
the Hawaii Right to Farm Act (HRS Chapter 165) and Hawaii law limit the
circumstances under which farming operations may be deemed to be a
nuisance.
18. WARRANTIES AND REPRESENTATIONS.
(a) NB 3's WARRANTIES. NB 3 makes the following representations
and warranties which shall be true and correct as of the Effective Date and
as of the Closing Date:
(i) ORGANIZATION. NB 3 is a limited liability company duly
organized, validly existing and in good standing under the laws of
the State of Delaware, and NB 3's Managing Member is KLC Holding
Corp., a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware (the "Managing
Member"). NB 3 and the Managing Member are qualified to do business
in the State of Hawaii. At or prior to Closing, NB 3 shall deliver to
Escrow Agent (A) certificates of good standing from the State of
Delaware, showing NB 3 and the Managing Member to be in legal
existence and good standing under the laws of the State of Delaware,
and (B) certificates of good standing from the State of Hawaii
Department of Commerce and Consumer Affairs showing NB 3 and the
Managing Member to be duly authorized to do business in the State of
Hawaii and in good standing under the laws of the State of Hawaii
(collectively, the "NB 3 Certificates").
(ii) AUTHORIZATION. NB 3 has full power and authority to
execute and deliver this Agreement, the NB 3 Closing Documents and
all other documents to be executed and delivered by NB 3 under this
Agreement and the authority to perform its obligations
27
under this Agreement, the NB 3 Closing Documents and such other
documents. At or prior to Closing, NB 3 shall deliver to Escrow Agent
resolutions of the Managing Member's board of directors authorizing
the execution of this Agreement by NB 3 and the sale of the Property
and the performance of NB 3's other obligations pursuant to the terms
of this Agreement and authorizing the person(s) executing instruments
or agreements relating to such sale to execute, acknowledge and
deliver this Agreement and the NB 3 Closing Documents on behalf of
the Managing Member, as the managing member of NB 3 (the "NB 3
Resolutions").
(iii) CONFLICTING OBLIGATIONS. To NB 3's Knowledge, neither
the execution or delivery of this Agreement and the NB 3 Closing
Documents, nor the consummation of the transactions contemplated
herein or therein, will conflict with, or result in a breach of,
(a) any contract, license or undertaking to which NB 3 is a party,
(b) any judgment, order, decree, or injunction to which NB 3 is
subject, (c) any laws or regulations applicable to NB 3 or the
Property, or (d) any easements, covenants, restrictions,
reservations, liens and other matters affecting title to the Property
as of Closing.
(iv) PROCEEDINGS. Except as may arise after the Effective
Date, no legal or administrative suit, action or proceeding is
pending or, to NB 3's Knowledge, threatened against NB 3 or the
Property which (a) would adversely affect the NB 3's ability to
consummate the transactions as contemplated in this Agreement, (b)
alleges that the Property does not conform to the requirements of any
currently applicable Permits, laws, regulations, or judicial or
administrative judgment, orders, decree, or injunction, (c) alleges
that the Property violates or does not conform with any easements,
covenants, restrictions, reservations, liens and other matters
affecting title to the Property, or (d) could result in a lien,
attachment or lis pendens affecting all or any portion of the
Property.
(v) CONTRACTS; MECHANIC'S LIENS. Except as described or
referenced in this Agreement, to NB 3's Knowledge, there are no
unrecorded contracts affecting the Property which will continue to
affect the Property after Closing. NB 3 shall cause to be discharged
all mechanics' or materialmen's liens, if any, arising from any labor
or material furnished to the Property prior to Closing (except those
which relate to Optionee's activities on or relating to the Property
pursuant to Section 10 (b) of this Agreement or pursuant to the Xxx
0/Xxx 0 Xxxxxx Xxxxxxx Construction Agreement).
(vi) CONDEMNATION, ZONING, ASSESSMENTS. Except as may arise
after the Effective Date, to NB 3's Knowledge, there are no pending
or threatened condemnation, zoning, or other formal land use
regulation proceedings which could materially affect the Property,
nor has NB 3 received written notice from an authorized taxing
authority of any special assessment proceedings affecting the
Property.
(vii) LEASES. Except as may exist or arise under the SMA
Requirements, the North Beach CCRs, or the Water Quality Monitoring
Right of Entry, to NB 3's
28
Knowledge, there are no leases, tenancy agreements, licenses or
occupancy agreements affecting or relating to the Property or any
unrecorded agreements granting any third party the right to use or
occupy the Property, or any part thereof, which will remain in effect
after Closing.
(viii) FURTHER ENCUMBRANCES. Except as expressly permitted
under this Agreement or the Xxx 0 Xxxxxxxx Xxxxxxxxx, from and after
the Effective Date NB 3 shall not cause or permit the Property or any
part thereof to be encumbered in any manner which would remain in
effect after Closing, without the prior written consent of Optionee.
(ix) HAZARDOUS MATERIALS. Except as may result or arise after
the Effective Date, to NB 3's Knowledge, (a) there are no Hazardous
Materials present on or under the Property in any quantity or manner
that violates any Hazardous Materials Laws in effect as of the
Effective Date, and (b) from and after December 1, 1988, NB 3 has not
received any written notice that the Property is in violation of any
Hazardous Materials Laws.
(x) LAND USE REQUIREMENTS. To NB 3's Knowledge, neither NB 3
nor any of the Amfac-Related Entities is in material default under
any of the SMA Requirements, the SMA Requirements Agreement, the
North Beach CCRs, or the Water Quality Monitoring Right of Entry, as
and to the extent affecting the Property, nor, to NB 3's Knowledge,
has an event occurred which, with notice or the expiration of a grace
or cure period, would result in a material default by NB 3 or any of
the Amfac-Related Entities under any of the SMA Requirements, the SMA
Requirements Agreement, the North Beach CCRs or the Water Quality
Monitoring Right of Entry as and to the extent affecting the
Property.
(xi) WASTEWATER CAPACITY. KDC holds rights to reserved
wastewater capacity at the Lahaina Wastewater Treatment Plant
sufficient to assign to Optionee, pursuant to this Agreement, rights
to such wastewater capacity as may be required by the County of Maui
for Optionee's development on the Property of 350 Units.
(xii) COMPLETENESS OF DOCUMENTS. To NB 3's Knowledge, all
documents delivered by NB 3 to Optionee as provided in this Agreement
are true and complete originals or copies of the originals of such
documents.
(xiii) TRADE NAME LICENSE AGREEMENT. The party that shall
execute the Trade Name License Agreement as the Service Xxxx Xxxxxx
shall be the holder of the federally registered service xxxx with
respect to the term and word "Kaanapali" and shall have full
authority to execute and deliver the Trade Name License Agreement and
to license the use of such service xxxx.
As used in this Section 18, the term "NB 3's Knowledge" means the
actual knowledge of Xxxxxx X. Xxxxxxx, Senior Vice President of NB 3, and
Xxxx X. Xxxxxx, vice-president of NB 3 (such
29
individuals being most responsible for accurate information relating to the
matters set forth above), after reasonably diligent and good faith
investigations of the files and records of NB 3 and the other Amfac
Companies (as defined in Section 20 below), and reasonably diligent
inquiries of the current employees and consultants of NB 3 and the other
Amfac Companies responsible for the management, operation and development
of the Property and records relating to the Property, KDC's reserved
wastewater capacity at the Lahaina Wastewater Treatment Plant and the items
listed in Section 10(c) of this Agreement.
The representations and warranties of NB 3 set forth in this Section
18(a) shall survive Closing for a period of two years, and, upon the
expiration of such two-year period said representations and warranties
shall be of no further force and effect, Optionee shall have no further
rights or remedies thereunder, and NB 3 shall have no further liability
with respect thereto.
(b) OPTIONEE'S WARRANTIES. Optionee makes the following
representations and warranties which shall be true and correct as of the
Effective Date and as of the Closing Date:
(i) ORGANIZATION. Optionee is a limited partnership duly
organized, validly existing and in good standing under the laws of
the State of Delaware, and Optionee's general partner is Northwest
Maui Corporation, a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware (the
"General Partner"). Optionee and the General Partner are qualified to
do business in the State of Hawaii. At or prior to Closing, Optionee
shall deliver to Escrow Agent (A) a certificate of good standing from
the State of Delaware showing Optionee to be in legal existence and
in good standing under the laws of the State of Delaware, and (B) a
certificate of good standing from the State of Delaware showing the
General Partner to be in legal existence and in good standing under
the laws of the State of Delaware, and (C) certificates of good
standing from the State of Hawaii Department of Commerce and Consumer
Affairs showing Optionee and the General Partner to be duly
authorized to do business in the State of Hawaii and in good standing
under the laws of the State of Hawaii (collectively "Optionee's
Certificates").
(ii) AUTHORIZATION. Optionee has full power and authority to
execute and deliver this Agreement, and Optionee (or the Permitted
Assignee or Successor, as the case may be) shall have full power and
authority to execute and deliver the Optionee Closing Documents and
all other documents to be executed and delivered by Optionee (or the
Permitted Assignee or Successor) under this Agreement and the
authority to perform Optionee's obligations under this Agreement. At
or prior to Closing, Optionee shall deliver to Escrow Agent a
resolution of the board of directors of the General Partner (or the
Permitted Assignee or Successor) authorizing the purchase of the
Property and the performance of Optionee's other obligations pursuant
to the terms of this Agreement and authorizing the person(s)
executing instruments or agreements relating to such purchase to
execute, acknowledge and deliver the Optionee's Closing Documents on
behalf of the
30
General Partner, as the general partner of Purchaser (or the
Permitted Assignee or Successor) (the "Optionee Resolutions").
(iii) BINDING OBLIGATIONS; CONFLICTING AGREEMENTS. This
Agreement and all documents required hereby to be executed by
Optionee are and shall be valid, legally binding obligations and
enforceable against Optionee in accordance with their terms. Each of
the persons signing this Agreement and all such other documents on
behalf of Optionee (or the Permitted Assignee or Successor) is and
shall be authorized to do so. To Optionee's knowledge, neither the
execution or delivery of this Agreement, the Optionee Closing
Documents or such other documents, nor the consummation of the
transactions contemplated herein, will conflict with, or result in a
breach of, (a) any contract, license, or undertaking to which
Optionee is a party, (b) any judgment, order, decree, or
injunction to which Optionee is subject, and (c) any laws or
regulations applicable to Optionee.
(iv) PROCEEDINGS; VIOLATIONS. No legal or administrative
suit, action or proceeding is pending or, to Optionee's knowledge,
threatened against Optionee which would adversely affect its ability
to consummate the transactions as contemplated in this Agreement.
19. DEFAULT AND REMEDIES.
(a) OPTIONEE'S DEFAULT/NB 3's REMEDIES. In the event of
Optionee's default in the performance of any obligation or covenant
under this Agreement prior to Optionee's effective exercise of the
Option, NB may terminate this Agreement and further avail itself of
any and all remedies available to it at law or in equity. In the
event of Optionee's default in the performance of any obligation or
covenant under this Agreement after Optionee's exercise of the Option
and which causes Closing not to take place in accordance with this
Agreement, NB 3 shall be released from any obligation to sell or
otherwise convey the Property to Optionee, and NB 3 shall be entitled
to retain the Deposit paid by Optionee under this Agreement,
including all accrued interest, as liquidated damages for such
default. In the event of Optionee's default in the performance of
Optionee's obligations under this Agreement which does not prevent
Closing from occurring, or of any other obligation or covenant of
Optionee under this Agreement after the Closing Date, NB 3 may avail
itself of any and all remedies available to it at law or in equity.
NB 3 shall have no right to seek punitive damages from Optionee by
reason of a default hereunder, and NB 3 hereby expressly waives any
such right. Without limiting the foregoing, the occurrence of an
"Event of Default" under that certain Mortgage, Security Agreement
and Financing Statement dated as of August 5, 2003, recorded at the
Bureau and also at the Land Court (the "Lot 4 Mortgage"), shall
constitute a default by Optionee under this Agreement, and NB 3 may,
in addition to, but not to the exclusion of, all other rights and
remedies of NB 3 under this Agreement and all other rights and
remedies of the Lot 4 Seller under the Lot 4 Mortgage, terminate the
Option and this Agreement, after which Optionee shall have no further
or continuing rights hereunder.
31
(b) NB 3's DEFAULT/OPTIONEE'S REMEDIES. In the event of NB 3's
default in the performance of any obligation or covenant under this
Agreement which causes the Closing not to take place in accordance with
this Agreement, Optionee, at its election, may: (i) avail itself of the
equitable remedy of specific performance (to the extent reasonably capable
of performance); or (ii) in addition to, but not to the exclusion of,
Optionee's rights and remedies under subsection 19 (b)(iv) hereinbelow,
terminate this Agreement (except for indemnity obligations under the Right-
of-Entry Agreement and Section 30 of this Agreement and confidentiality
obligations under Section 31 of this Agreement) by written notice to NB 3,
whereupon the Deposit, including all interest accrued thereon prior to
disbursal of the Deposit to NB 3, shall be returned to Optionee; or (iii)
waive the default and proceed with the purchase of the Property in
accordance with this Agreement; or (iv) avail itself of any other remedy
available to it at law or in equity (provided, however, that the liability
of NB 3 and any of the Amfac-Related Entities for damages shall not exceed
Optionee's Actual Damages (as hereinafter defined), it being understood and
agreed that Optionee shall not be entitled to recover (A) consequential
damages of any kind, including but not limited to lost profits and/or lost
business opportunities, (B) special damages, or (C) punitive damages and/or
exemplary damages, or (D) any other damages in excess of Optionee's Actual
Damages, however defined, alleged, plead or denominated). In the event of
NB 3's default in the performance of any obligation or covenant of NB 3
under this Agreement which does not prevent the Closing from occurring, or
of any other obligation or covenant of NB 3 under this Agreement after the
Closing Date, Optionee may avail itself of any and all remedies available
to it at law or in equity (provided, however, that the liability of NB 3
and any of the Amfac-Related Entities for damages and/or penalties shall
not exceed, in the aggregate, the amount of the Purchase Price).
Notwithstanding anything to the contrary contained in this Agreement or
elsewhere, no parent, owner, affiliate, stockholder, member, director,
officer, or board member of NB 3 or any of the Amfac-Related Entities shall
have any personal liability pursuant to or in connection with this
Agreement or the sale of the Property. For the purposes of this Section
19(b), "Optionee's Actual Damages" shall mean and be limited to
reimbursement to Optionee for all out of pocket costs and expenses actually
paid or incurred by Optionee for negotiation of this Agreement and for
investigation of the Property and preparation for the Closing pursuant to
this Agreement (in an aggregate amount not exceeding $200,000.00), plus
other actual damages, if any, available to Optionee not exceeding, in the
aggregate, an additional $500,000.00.
(c) FEES AND COSTS. In any action at law or equity between NB 3
and Optionee occasioned by a default hereunder, the prevailing party shall
be entitled to collect its reasonable attorney's fees and court costs
actually incurred in the action from the non-prevailing party.
20. AMFAC-RELATED ENTITIES. As used in this Agreement, "Amfac-
Related Entities" shall mean NB 3, AHI, KDC, PMCo, Oahu MS Development
Corp., a Hawaii corporation, Amfac Property Investment Corp., a Hawaii
corporation, KLC Holding Corp., a Delaware corporation, Kaanapali Land,
LLC, a Delaware limited liability company, NB Lot 2, LLC, a Delaware
limited liability company, and NB Lot 4, LLC, a Delaware limited liability
company (collectively, the "Amfac Companies"), and any officer, director,
member, representative, employee, and/or agent thereof.
32
21. TRANSFER OR ASSIGNMENT OF THIS AGREEMENT. Optionee shall not
voluntarily or by operation of law assign, sell, or transfer any right,
interest or obligation under this Agreement without NB 3's express prior
written consent, which consent may be given or withheld in the sole and
absolute discretion of NB 3; provided, however, that NB 3 shall not
withhold its consent to an assignment of all of Optionee's rights,
interests and obligations under this Agreement to any corporation, limited
partnership, limited liability company or other business organization which
Optionee uses or causes to be formed, and in which Intrawest Corporation, a
corporation continued under the Canada Business Corporations Act, holds
(directly or indirectly through subsidiaries) an ownership interest, for
the purpose of purchasing, holding and developing the Property (a
"Permitted Assignee"), provided that the Permitted Assignee shall expressly
assume in writing all of Optionee's obligations under this Agreement.
Except as otherwise expressly provided in writing signed by NB 3, no
assignment by Optionee shall be construed or interpreted as a release of
Optionee from any of its obligations under this Agreement, including the
observance and performance of all terms, conditions and obligations
contained in this Agreement, or from any liability for the failure to so
observe or perform. Any attempted assignment of any or all of Optionee's
rights, interests or obligations under this Agreement without NB 3's prior
written consent shall be null and void. Each reference to "Optionee" in
this Agreement shall also refer to a Permitted Assignee and any other
assignee of Optionee's rights, interests and obligations under this
Agreement to which NB 3 consents in writing (a "Successor"). NB 3 may
assign its rights and obligations hereunder, to an affiliated entity in
connection with a transfer of the Property thereto, without the approval or
consent of Optionee.
22. BINDING EFFECT. All of the obligations of Optionee as
contained in this Agreement shall be binding upon and enforceable against
each person or entity identified as Optionee herein, and their respective
heirs, successors and assigns. All of the obligations of NB 3 as contained
in this Agreement shall be binding upon and enforceable against each person
or entity identified as NB 3 herein, and their respective successors and
assigns, and against any person or entity to whom all or any portion of the
Property may be transferred before the Closing.
23. TIME OF ESSENCE. Time is of the essence of each and every
provision of this Agreement.
24. NOTICES. Any notice, consent, waiver, demand, request, or
other instrument or communication to be given to or served upon any party
hereto in connection with this Agreement must be in writing, and may be
given by personal delivery or by certified or registered mail or by
facsimile transmission followed by confirming "hard copy," and shall be
deemed to have been given and received upon receipt, in the case of notice
by personal delivery or facsimile transmission, or seven calendar days
after a certified or registered letter containing such notice, properly
addressed, with postage prepaid, is deposited in the United States mail.
Such notices shall be given to the parties hereto at the following
addresses:
33
If to NB 3: NB Lot 3, LLC
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Fax No.: (000) 000-0000
With a Copy to: Xxxxx X. Xxxxxxxx
Case Xxxxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Fax No.: (000) 000-0000
If to Optionee: Intrawest Corporation
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxx Xxxxxxx and Xxxx Xxxxxxx
Fax No.: (000) 000-0000
With a copy to: Xxxxxx Xxxxx Xxxxx Xxxxxxxxx & Xxxxxx, LLC
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Esquire
Fax No.: 000-000-0000
Any party hereto may, at any time by giving five days' written notice
to the other party hereto, designate any other address in substitution of
or in addition to the foregoing address to which such notice shall be
given.
25. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between NB 3 and Optionee relating to the transactions covered by
this Agreement, and all prior and contemporaneous agreements,
representations, negotiations, and understandings of NB 3 and Optionee,
oral or written, related thereto are hereby superseded and merged herein.
No agent, representative, salesman, or officer of either NB 3 or Optionee
has any authority to make, or has made, any statements, agreements, or
representations, either oral or in writing, express or implied, modifying,
adding to, or changing the terms and conditions of this Agreement, and
neither NB 3 nor Optionee has relied upon any representations not set forth
in this Agreement. No dealings between NB 3 and Optionee or custom shall be
permitted to contradict, add to, or modify the terms of this Agreement. No
waiver or amendment of the provisions of this Agreement shall be effective
unless in writing and signed by both NB 3 and Optionee. This Section 25
shall not be construed or interpreted as affecting the validity of any
instrument executed by NB 3 and Optionee in the form of any of the exhibits
attached to this Agreement, or as otherwise required to consummate the
transaction as contemplated by this Agreement.
34
26. SURVIVAL. Except for Sections 1, 2, 3, 5, 6, 7, 8, 9, and 11,
which shall be merged into the Deed, all provisions of this Agreement shall
survive Closing.
27. NO WAIVER. No waiver by NB 3 or Optionee of a breach of any of
the terms, covenants, or conditions of this Agreement by the other shall be
construed or held to be a waiver of any succeeding or preceding breach of
the same or any other term, covenant, or condition contained herein. No
waiver of any default by NB 3 or Optionee hereunder shall be implied
through any omission by the other to take any action on account of such
default if such default persists or is repeated, and no express waiver
shall affect a default other than as specified in such waiver. The consent
or approval by either NB 3 or Optionee to or of any act by the other
requiring consent or approval shall not be deemed to waive or render
unnecessary the consenting party's consent or approval to or of any
subsequent similar acts by the other party.
28. COUNTERPARTS. This Agreement may be executed in one or more
counterparts. It shall be fully executed when each party whose signature is
required has signed at least one counterpart even though no one counterpart
contains the signature of all the parties. Each executed counterpart shall
be deemed an original, but all of which together shall constitute one and
the same Agreement.
29. FACSIMILE SIGNATURES. NB 3 and Optionee agree that facsimile
signatures on this Agreement and any addenda or other documents related to
this Agreement shall be binding and effective for all purposes and treated
in the same manner as physical signatures. Notwithstanding the foregoing,
NB 3 and Optionee agree that they will promptly forward physically signed
copies of this Agreement and such other documents to Escrow Agent. However,
this Agreement and any other documents containing facsimile signatures
shall remain binding and effective even if the original documents are not
received by Escrow Agent. The parties understand that they are required to
physically sign the Deed, the Lot 3 Unit Count Declaration, and any other
document affecting an interest in real property, for recordation purposes.
30. BROKERAGE. NB 3 and Optionee each represents to the other that
each has not entered into any agreement, incurred any obligation, or knows
of any facts which might result in an obligation from any party to pay a
sales or brokerage commission or finder's fee in connection with the
purchase and sale contemplated by this Agreement. Optionee agrees to and
shall indemnify, defend, and hold harmless NB 3 and Amfac-Related Entities
from and against any loss, liability, cost, claim, demand, damage, action,
cause of action, and suit arising out of or in any manner relating to the
employment, engagement or use by Optionee of any consultant, advisor,
broker, or sales or marketing agent in connection with the purchase and
sale contemplated by this Agreement. NB 3 agrees to and shall indemnify,
defend, and hold harmless Optionee from and against any loss, liability,
cost, claim, demand, damage, action, cause of action, and suit arising out
of or in any manner relating to the employment, engagement or use by NB 3
or Amfac-Related Entities of any consultant, advisor, broker, or sales or
marketing agent in connection with the purchase and sale contemplated by
this Agreement. This Section 30 shall be binding on Optionee and NB 3
whether or not Closing occurs, and shall survive Closing.
35
31. CONFIDENTIALITY. Optionee and NB 3 agree to maintain the
confidentiality as to the terms and conditions of this Agreement, except
such disclosures to attorneys, accountants, consultants, lenders,
investors, and others as are reasonably required in order to consummate the
transactions contemplated in this Agreement, or otherwise required by
governmental authority or a court with appropriate jurisdiction. Optionee
and NB 3 shall instruct their respective consultants, affiliates,
professionals, lenders, and others engaged by them in connection with the
transactions contemplated in this Agreement to abide by the confidentiality
provisions of this Section 31. All information, studies, and reports
relating to the Property obtained by Optionee, either by the observations
and examinations of its agents and representatives or as disclosed to it by
or through NB 3 that does not pertain to other property owned by Optionee,
shall remain confidential, and if the transaction contemplated herein fails
to close for any reason, all such information, reports, and studies
obtained by Optionee from or through NB 3 shall be immediately returned by
Optionee to NB 3, and all copies thereof destroyed, and Optionee shall make
no further distributions, disclosures or other use of any such information,
reports, and studies. All press releases and other publicity and public
communications relating to this Agreement, and the method of release
thereof, shall require prior approval of NB 3, which approval shall not be
unreasonably withheld or delayed. This Section 31 shall be binding on
Optionee and NB 3 whether or not Closing occurs, and shall survive Closing.
32. NO JOINT VENTURE. It is hereby acknowledged by Optionee and
NB 3 that any relationship between them created hereby is not intended to
be and shall not in any way be construed to be that of a partnership, joint
venture, or principal and agent. It is hereby further acknowledged that any
rights reserved herein by NB 3 with respect to the Property or any
documents or matters related thereto is solely for the purpose of either
securing NB 3's interest in this transaction or protecting NB 3's property
interests and values. Any approvals or other action by NB 3 pursuant to
this Agreement, or any document related thereto, is solely for NB 3's
benefit, and no person or entity may rely upon NB 3's approvals or actions
hereunder for any other purpose.
33. FURTHER ASSURANCES. Each of the parties shall execute and
deliver all additional papers, documents, and other assurances, and shall
do all acts and things, reasonably necessary in connection with the
performance of their respective obligations hereunder to carry out the
intent of this Agreement.
34. CAPTIONS. Captions given to various sections in this
Agreement, and terms used for definition purposes herein, are for
convenience and reference purposes only and are not intended to and shall
not modify or affect the meaning, construction, or interpretation of any of
the substantive provisions hereof.
35. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Hawaii.
36
36. USE OF KAANAPALI NAME. Purchaser acknowledges that the term
and word. "Kaanapali" is a federally registered service xxxx of Seller or
certain of the Amfac-Related Entities ("Service Xxxx Xxxxxx"). Purchaser
shall not, without the prior written consent of the Service Xxxx Xxxxxx,
which consent may be withheld or conditioned in the sole and absolute
discretion of the Service Xxxx Xxxxxx, use the word "Kaanapali", or any
trade name, trade xxxx, service xxxx, or logotype held or used by Seller or
Amfac-Related Entities related thereto, in connection with the acquisition,
ownership, use, development, or sale of the Property. At the Closing,
Seller shall cause the Service Xxxx Xxxxxx to execute and deliver to
Purchaser, and Purchaser shall execute and deliver to the Service Xxxx
Xxxxxx, an agreement (the "Trade Name License Agreement"), in the form
attached as EXHIBIT "11" to this Agreement or such other form as may be
agreed in writing by NB 3 and Optionee prior to Optionee's delivery of the
Notice of Exercise, pursuant to which the Service Xxxx Xxxxxx shall license
to Purchaser the right to use, or otherwise agree with Purchaser as to use
of, the word "Kaanapali" and the trade name "Kaanapali North Beach" for
such purposes, and on such terms and conditions, as shall be set forth in
the Trade Name License Agreement.
37. NO RECORDATION. This Agreement shall not be recorded by NB 3
or Optionee, and any violation of this provision by Optionee shall, at the
option of NB 3 to be exercised by written notice from NB 3 to Optionee,
cause this Agreement to be null and void, except only as provisions hereof
which, under the terms hereof, are to survive termination of this
Agreement. Notwithstanding the foregoing, a short form memorandum of this
Agreement (the "Memorandum of Lot 3 Option Agreement"), in the form
attached hereto as EXHIBIT "12", will be recorded as an encumbrance on
title to Lot 3; provided, however, that upon any termination of this
Agreement, NB 3 and Optionee agree to promptly execute, acknowledge and
record a cancellation of the Memorandum of Lot 3 Option Agreement
effectively releasing and removing the Memorandum of Lot 3 Option Agreement
from title to Lot 3.
38. INCORPORATION OF EXHIBITS. Exhibits "1", "2", "3", "4", "5",
"6", "7", "8", "9", "10", "11" and "12" to this Agreement are incorporated
into this Agreement by this reference.
37
NB 3 and Optionee have executed this Agreement as of the Effective
Date.
NB LOT 3, LLC, a Delaware limited liability
company
By: KLC Holding Corp.,
a Delaware corporation
Its Managing Member
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: XXXXXX X. XXXXXXX
Title: SENIOR VICE PRESIDENT
NB 3
MAUI BEACH RESORT LIMITED PARTNERSHIP,
a Delaware limited partnership
By: NORTHWEST MAUI CORPORATION,
a Delaware corporation
Its General Partner
By: /s/ Xxxxxx Xxxxxx
------------------------------
Name: XXXXXX XXXXXX
Title: President
Optionee
38
NB Xxx 0, XXX
XXXXX XX XXXXXX )
) SS.
CITY & COUNTY OF HONOLULU )
On AUG 4 2003, before me personally appeared XXXXXX X. XXXXXXX, to me
personally known, who, being by me duly sworn or affirmed, did say that
such person(s) executed the foregoing instrument as the free act and deed
of such person(s), and if applicable, in the capacities shown, having been
duly authorized to execute such instrument in such capacities.
/s/ Jauis X. Xxx
------------------------------
Notary Public, in and for said
County and State
Type or Print Name: Jauis X. Xxx
My Commission expires: [ illegible ]
39
NB Xxx 0, XXX
XXXXXXXX XX XXXXXXX XXXXXXXX)
) SS.
CANADA )
On JULY 31, 2003, before me personally appeared XXXXXX XXXXXX, to me
personally known, who, being by me duly sworn or affirmed, did say that
such person(s) executed the foregoing instrument as the free act and deed
of such person(s), and if applicable, in the capacities shown, having been
duly authorized to execute such instrument in such capacities.
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Notary Public, in and for said
Province
Type or Print Name: Xxxxxxx X. Xxxxxxxx
My commission does not expires: ________
XXXXXXX X. XXXXXXXX
BARRISTER & SOLICITOR
SUITE 2300, 0000 XXXXXXXX XX.
X.X. XXX 00000, XXXXXXXXX, X.X. X0X 0X0
TELEPHONE (000) 000-0000
39
CANADA )
PROVINCE OF BRITISH COLUMBIA)
CITY OF VANCOUVER, ) S.S.
CONSULATE GENERAL OF THE )
UNITED STATES OF AMERICA )
I, Xxxxxxxxx Xxxxxx Xxxxxx, Consul of the United States of America, at
Vancouver, in the Province of British Columbia, duly commissioned and
qualified, do hereby certify that XXXXXXX XXXXXXX XXXXXXXX, before whom the
annexed document has been executed, was at the time he signed the annexed
certificate a Notary Public at VANCOUVER, in the Province of British
Columbia, Canada.
IN WITNESS WHEREOF I have here unto
[ AFFIXED SEAL ] set my hand and affixed the Seal of the
Consulate General at Vancouver
on August 1, 2003.
/s/ Xxxxxxxxx Xxxxxx Xxxxxx
--------------------------------------
Xxxxxxxxx Xxxxxx Xxxxxx
Consul of the United States of America
